Question

Companies who believe that higher sales volume leads to lower unit costs and higher long-run profits are attempting to Answer .

A) maximize their market share
B) skim the market
C) become a product-quality leader
D) merely survive in the market
E) maximize their current profits

Answer 1

Answer:

A) Maximize their market share.

Explanation:

Companies which believe higher sales volume will drive the cost down (& profits upward) will need to sell more of their products to achieve this target.

For example, if a bike manufacturer thinks that he can reduce cost by higher number of sales, he must maximize his market share and target more and more people to buy the bikes, let it be child, millennial, parents, everyone.

This will derive the sales volume to be higher and the costs to be lower (& higher long-run profits).